Firm Size Effects and the Association between Excess Returns and LIFO Tax Savings
重新检验了Biddle和Lindahl关于LIFO采用带来税收节省与市场正向反应的研究，发现其结论可能受企业规模效应干扰，并提出了三种替代解释。
Biddle and Lindahl [1982] (henceforth B-L) used cross-sectional regressions to analyze the market reaction for 311 NYSE firms that adopted LIFO in the period 1973-80. Fifteen-month excess returns were regressed on an unexpected earnings variable and a measure of the tax savings from LIFO adoption. The coefficient on the tax savings variable was positive and highly significant, leading to the conclusion that the market reacted positively to the cash-flow implications of LIFO adoption. This paper reexamines the B-L analysis by enlarging the sample and addressing several methodological concerns. The results, which suggest B-L's findings are attributable to the confounding effects of firm size, are consistent with any of three views: (1) the lack of a positive market reaction to LIFO adoption; (2) the inadequacy of adoption-year tax savings as a proxy for the net benefit of LIFO adoption; or (3) the confounding of the market reaction to LIFO adoption with the reaction to other events, because returns are cumulated over such a long time period. Section 2 describes the data collection procedures. Section 3 presents the results, and section 4 offers some conclusions.